Sunday, November 25, 2012

Fighting Inequality

NYT reporter Nicholas Kristoff notes that private power generators are extremely useful given the poor quality of modern US electricity infrastructure. This governmental inefficiency leads him to the conclusion that we need more progressive taxation. In the second century BC Cato the Elder ended each of his speeches with 'And, Carthage must be destroyed'. I think liberals should simply append all their posts/articles/editorials with "and, tax the rich and spend more" via some symbol (§) just to save space. Everything they see supports this conclusion in their minds.

Alas, to what end? Kristoff laments bad public schools, parks, neighborhoods, and libraries. Spending on these items, per capita, has risen over time. It seems indefensible to assert that the problem is a lack of money, given we spent half as much 50 years ago, failing districts like Los Angeles and Washington DC have some of the highest per pupil spending, I don't see how money is the problem.

The main pretext for equality is that prosperous societies have less inequality, ergo, less inequality creates prosperity. It's a pretext because I think the main reason most liberals want to tax the rich more and have bureaucrats spend it is simply to bring the wealthy down a notch, why they really don't care that historically spending on education doesn't increase learning: that's not the point.

I'm a libertarian, but not because I think it maximizes welfare given current capital, but because it creates more capital by motivating us to act better, which helps us in spite of ourselves.

When we treat man as he is, we make him worse than he is; when we treat him as if he already were what he potentially could be, we make him what he should be.

~Goethe

If I accepted our envious instincts as optimal I would be indifferent to efficiency, because in aggregate relative status is no different here as in Haiti. I'm glad I have the wherewithal to read and think about ideas, a luxury unaffordable for most of my ancestors, and this isn't possible because of appealing to the mob's instincts.

Look at how we've decided to lessen inequality through the public schools: we don't expel troublemakers, we don't fail under-performing kids, we don't encourage specialized advanced curriculum. The result are schools teaching to the lowest common denominator, and classes distracted with behavioral issues that overwhelm any potential for learning. Any parent with the wherewithal moves to districts where such anarchy has a lower level of dysfunction, and leaves this mess for those unable to move, so these inner city schools become extremely dysfunctional. Kids at poor schools realize diplomas from such institutions don't mean anything, and drop out more frequently, lowering their ultimate human capital acquisition.

The result is that while schools prioritize equality, the result is highly unequal, treating unequals the same in the school. The failure of public schools is lamented as a result of inadequate funding, which is totally orthogonal to the drivers of their poor performance.

In a totally different fashion, affirmative action creates greater inequality via mismatching minorities, putting them in groups where they are underqualified, leading to greater discouragement and switching to easier majors that aren't as helpful. In healthcare, making everyone have the same 'rights' to health care inflates our health costs. Trying to ameliorate inequality via top-down directives is invariably counterproductive at the limited objective of reducing inequality.

What makes private institutions excellent is that they have the right to exclude those who ruin it for everyone. They require an investment by their consumers so they don't take these things for granted, but rather respect their access. This should give those at the bottom an incentive to do well, and a place to go if they do well. In contrast, by making all their public opportunities non-exclusive regardless of behavior, everything is lessened and individuals have less incentive to become better persons to get access to these better things, and also ruin it for everyone else. My city library is way station for noisy kids, so I never hang out there.

Most liberal think prioritizing equality in education, crime, and parks, is an obvious way to increase our wealth, which not coincidentally takes the rich down a notch, unaware that these same policies just make inequality not as much within schools as between them. Forcing everyone to have the same public school/library/healthcare will merely create a two tier systems and raises costs for everyone. There are lots of things we can do to help our infrastructure and public objectives right now, but they aren't nearly as popular because they don't take power away from the rich and give it to bureaucrats (eg, allow nurses to distribute penicillin, allow power plants to invest in the best technology, don't force refineries to use ethanol, give students education vouchers). The failure of past government policies is a poor reason for a larger government.

5 comments:

Mercury
said...

The science surrounding the question of whether or not there is a strong correlation between $ per student spent and educational outcome is much more “settled” than the science concerning what the weather will be like in 100 years.

The great Kansas City school experiment of the 1990s http://www.cato.org/pubs/pas/pa-298.html (which produced ~zero positive results after having spent more money per pupil than any of the largest 280 school districts in the country) should have been the US public school reform equivalent of Louis Pasteur disproving spontaneous generation in 1861. But alas, when you stand instead on the shoulders of unicorns you see only as far as you want to see.

However, such a state of affairs is not without its rewards as you may remember from last year when an amateur blogger/hot rod enthusiast mopped the floor with Paul Krugman after one of his rants about more money = better education.

The following link is actually to a follow-up post of his (which is even better) but you can backtrack to the original from there: http://iowahawk.typepad.com/iowahawk/2011/03/badgering-the-witless.html

Everything written by NY Times editorialists is steeped in envy and political correctness. They cannot even conceive of another worldview, other than being driven by some sort of primitive viciousness. As for Kristoff, what is he supposed to be an expert in? Nothing as far as I can tell. Just a backup leftists? Clearly he learned nothing from living in China a decade ago.

and Eric, you might add "and government should be smaller" to the end of all your writings.

Of course efforts have to be applied well to get good outcomes, and expenditures are often made without achieving anything. This applies to both government and non-government organisations. Most companies fail, and most government programs fail, but some of each succede wildly.

The private sector was created by governments to enable governments to function better, and it does. There is a symbiotic relationship between governments and companies.

Nicholas Kristoff's line of logic may well be faulty, but a faulty line of logic proves nothing much. Examples of poor education programs again prove nothing much. There are many different ways to prioritise equality, and most of them probably don't work. Most approaches to most things don't work, but a few do.

The failure of past government policies is no reason for any generalised approach, including larger or smaller government.

You need to assess each proposed change, and if government ends up bigger or smaller as a result, so what. It's the net benefits that matter, and increased equality is a benefit, but only one of many benefits that may or may not come out of any particular change.

You wrote: " Most companies fail, and most government programs fail, but some of each succede wildly."

Most failed companies die; failed government programs rarely do. That fact alone pretty much invalidates the rest of your comments.

Plus, your criteria for determining success/failure are kind of vague, even within the confines of a short post. Have you read Jim Manzi's "Uncontrolled"?

Finally, as a matter of historical record, I don't think that "the private sector was created by government...." That's a very problematic assertion. And I suppose you could characterize the relationship governments and companies as "symbiotic", although some other adjectives come to mind. Have you read Mancur Olson?